Ovintiv (OVV) AI Stock Analysis

• Market Cap: $11.10B
• Dividend Yield: 2.78%
• Average Volume (3M): 2.90M
• Price to Earnings (P/E): 18.9
• Beta (1Y): 0.85
• Revenue Growth: -12.92%
• EPS Growth: -68.16%
• Country: US
• Employees: 1,623
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 1.02
• Shares Outstanding: 257,037,320
• 10 Day Avg. Volume: 3,024,230
• 30 Day Avg. Volume: 2,900,429
• PEG Ratio: -0.20
• Price to Book (P/B): 1.04
• Price to Sales (P/S): 1.17
• P/FCF Ratio: 7.56
• Enterprise Value/Market Cap: 1.48
• Enterprise Value/Revenue: 1.79
• Enterprise Value/Gross Profit: 3.28
• Enterprise Value/Ebitda: 4.98
• 1Y Price Target: $53.41
• Price Target Upside: 23.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17

• Rating: 70 Outperform
• Price Target: $45.00 ▲(4.24% Upside)

Ovintiv's overall stock score reflects strong earnings call performance and fair valuation, offset by mixed financial performance and neutral technical indicators. The company's strategic initiatives and operational improvements are significant positives, while liquidity and market exposure remain areas to watch.

Positive Factors

Operational Excellence

Operational excellence through cost savings and increased drilling speed enhances competitive returns, supporting long-term profitability.

Debt Reduction

Effective debt reduction improves financial stability and flexibility, allowing for better capital allocation and shareholder returns.

Innovative Technology Use

Leveraging AI technology enhances operational efficiency and cost-effectiveness, providing a sustainable competitive advantage.

Negative Factors

Declining Net Profit Margins

A decline in net profit margins indicates pressure on profitability, which could affect long-term earnings and shareholder value.

Free Cash Flow Growth Decline

Reduced free cash flow growth may limit future investments and debt servicing, impacting long-term financial health.

Exposure to Market AECO Prices

Exposure to volatile AECO prices can lead to unpredictable revenue streams, posing a risk to financial stability and planning.

Ovintiv Business Overview & Revenue Model

Company Description

Ovintiv Inc., together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids. It operates through USA Operations, Canadian Operations, and Market Optimization segments. The company's principal assets include Permian in west Texas and Anadarko in west-central Oklahoma; and Montney in northeast British Columbia and northwest Alberta. Its other upstream assets comprise Bakken in North Dakota, and Uinta in central Utah; and Horn River in northeast British Columbia, and Wheatland in southern Alberta. The company was formerly known as Encana Corporation and changed its name to Ovintiv Inc. in January 2020. Ovintiv Inc. was incorporated in 2020 and is based in Denver, Colorado.

How the Company Makes Money

Ovintiv generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids. The company employs a business model that capitalizes on the extraction and production of these hydrocarbons, selling them at market prices to refiners, utilities, and industrial customers. Key revenue streams include upstream activities in various resource-rich areas such as the Permian Basin, Montney, and Bakken formations, where Ovintiv has established significant production capabilities. Additionally, the company benefits from hedging strategies that help mitigate price volatility and secure predictable cash flows. Strategic partnerships and joint ventures with other energy firms also enhance Ovintiv's operational efficiency and access to capital, contributing to its overall earnings.

Ovintiv Financial Statement Overview

Summary

Ovintiv's financial statements present a mixed picture. Strong gross profit margins and a stable balance sheet are offset by declining net profit margins and reduced free cash flow growth, raising concerns about operational efficiency and liquidity management.

Income Statement

Ovintiv's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) data indicates a strong gross profit margin of 63.82%, reflecting efficient cost management. However, the net profit margin has decreased to 6.46% from 12.29% in the previous year, indicating pressure on profitability. Revenue growth is positive at 1.14%, but this is a slowdown compared to past growth rates. EBIT and EBITDA margins have also declined, suggesting challenges in operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.64, which is manageable and shows improvement from previous years. Return on equity has decreased to 5.74%, indicating reduced profitability for shareholders. The equity ratio is strong, suggesting a solid capital structure. However, the decline in ROE is a concern for investor returns.

Cash Flow

Cash flow analysis reveals a significant decline in free cash flow growth, down by 57.14% in the TTM period, which could impact future investments and debt servicing. The operating cash flow to net income ratio remains healthy at 1.38, indicating good cash generation relative to net income. However, the free cash flow to net income ratio has decreased, highlighting potential liquidity challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.21B	9.15B	10.88B	12.46B	8.66B	6.09B
Gross Profit	5.03B	4.98B	5.90B	6.88B	4.22B	2.71B
EBITDA	3.31B	4.05B	4.69B	4.98B	2.77B	-3.52B
Net Income	595.00M	1.13B	2.08B	3.64B	1.42B	-6.10B
Balance Sheet
Total Assets	19.73B	19.25B	19.99B	15.06B	14.05B	14.47B
Cash, Cash Equivalents and Short-Term Investments	20.00M	42.00M	3.00M	5.00M	195.00M	10.00M
Total Debt	6.60B	6.29B	6.68B	4.49B	5.78B	8.01B
Total Liabilities	9.36B	8.92B	9.62B	7.37B	8.98B	10.63B
Stockholders Equity	10.38B	10.33B	10.37B	7.69B	5.07B	3.84B
Cash Flow
Free Cash Flow	1.70B	1.42B	1.42B	2.04B	1.61B	159.00M
Operating Cash Flow	3.93B	3.72B	4.17B	3.87B	3.13B	1.90B
Investing Cash Flow	-2.51B	-2.46B	-5.52B	-1.79B	-525.00M	-1.86B
Financing Cash Flow	-1.40B	-1.23B	1.36B	-2.27B	-2.42B	-206.00M

Ovintiv Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.17
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OVV, the sentiment is Positive. The current price of 43.17 is above the 20-day moving average (MA) of 41.82, above the 50-day MA of 40.66, and above the 200-day MA of 39.43, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 60.46 is Neutral, neither overbought nor oversold. The STOCH value of 77.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OVV.

Ovintiv Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
APA	78 Outperform	8.83B	8.17	9.64%	4.05%	12.13%	-67.53%
PR	74 Outperform	11.39B	8.89	12.05%	4.39%	16.37%	21.22%
RRC	74 Outperform	8.97B	18.79	11.63%	0.93%	19.95%	0.94%
MTDR	73 Outperform	6.10B	7.05	15.90%	2.42%	16.20%	-12.42%
OVV	70 Outperform	$11.10B	18.90	5.75%	2.78%	-12.92%	-68.16%
AR	67 Neutral	10.54B	23.76	―	―	11.65%	415.90%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Ovintiv Corporate Events

Ovintiv Reports Q2 2025 Results, Reduces Net Debt

On July 24, 2025, Ovintiv Inc. announced its second quarter 2025 financial and operating results, highlighting a reduction in net debt by $217 million and an increase in full-year production guidance. The company generated $1,013 million in cash from operating activities and $392 million in free cash flow after capital expenditures. Ovintiv also declared a quarterly dividend of $0.30 per share, payable on September 29, 2025. The company remains committed to returning value to shareholders through dividends and share buybacks, having returned $223 million in the second quarter. Additionally, Ovintiv lowered its full-year capital guidance while increasing its production outlook, reflecting strong well performance and enhanced capital efficiency.

Ovintiv Shares Investor Presentation on Website

On July 8, 2025, Ovintiv Inc. shared a presentation on its website in conjunction with an investor field tour. The presentation is not considered filed under the Securities Exchange Act of 1934 and is not subject to its liabilities, nor is it incorporated by reference under the Securities Act of 1933 unless specifically stated.